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BlackRock, Temasek plant mushroom leather round

Illustration of a trophy shaped like mushrooms.

Illustration: Maura Losch/Axios

A joint fund created by BlackRock and Temasek signed its first investment, in mushroom leather startup MycoWorks, its global head Meghan Sharp tells Axios.

Why it matters: Known as Decarbonization Partners, the partnership was formed by the two investment groups to tackle the dual responsibility of educating clients on the risks of climate change to their portfolios and to help them invest in solutions, Sharp says.

Details: Decarbonization Partners is participating in the $125 million, Series C round that MycoWorks raised earlier this year.

  • "The strategy is very much a key part of our commitment to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner," Sharp explains.

Catch up fast: Last year BlackRock and Singapore's Temasek teamed up to create late-stage VC and early growth PE funds that place bets on companies focused on decarbonization.

  • The pair intend to commit a combined US$600 million in initial capital to invest in multiple funds, with the initial fund aiming to raise a total of $1 billion.

Between the lines: "We said several years ago that we believe climate change is going to impact the financial performance of investments both at the asset and portfolio levels," Sharp says.

Of note: Proceeds from the Series C are being invested in MycoWork's first full-scale mushroom leather production plant, located in South Carolina, MycoWorks CEO Matt Scullin.

  • The leather alternative has already received a stamp of approval from Hermes, the French luxury goods giant, which is using the raw material in its handbags.

Editor’s note: This item has been updated to clarify, in the Catch up fast bullet, that the combined $600 million is intended for multiple funds.

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